Will Credit Suisse investment bankers really hang around to see whether the bank's new bonus scheme is a better deal than it looks? If they decide to leave, Barclays Capital could be the biggest beneficiary.
The Wall Street Journal's Deal blog points out that in the current market getting paid in distressed debt is no bad thing, particularly as CS has generously marked the debt behind its 'Partner Asset Facility' down to 65 cents in the dollar.
Nevertheless, the Financial Times said that investment bankers at Credit Suisse who had no hand in the creation of the noxious securities behind PAF might want to go elsewhere.
Headhunters say there's not much sign of this yet. "There's nowhere to go," says one M&A headhunter at a leading firm. "We haven't had any calls from Credit Suisse at all, which just goes to show how bad it."
"Credit Suisse bankers will wait for their bonus numbers next year and you might see movement after that," says another. "But you'd have to be pretty peeved to leave in this environment - recent lateral hires are usually among the first to be cut and people know that."
If CS bankers do decide to quit, boutiques and Barclays Capital are likely to be benefit. Small houses like Fenchurch Advisory Partners are said to be hiring, and BarCap is understood to be making selective M&A hires after poaching a team from ABN AMRO in May.
Go now, or stay forever
Credit Suisse bankers who don't leave in the first year or two might find themselves stuck. Both the clawback provision, which allows CS to recoup the 2.5% interest paid on assets underpinning bonuses for up to two years if an employee resigns, and the fact that rival institutions are unlikely to buyout assets in the PAF, will act as a disincentive to leave.
The Wall Street Journal's article questioned the legality of the clawbacks, claiming that they amount to "an onerous form of restrictive covenant."
One leading UK employment lawyer (who asked not be named in anticipation of representing CS bankers on this issue), says this is unlikely. "At the end of the day, clawbacks are probably lawful. It's just like an employer who's sponsored you for an MBA saying that you have to repay the fees if you leave within a specified time."